I Am a Software Developer and a Passionate Trader
Over the past five years, I have explored nearly every aspect of trading—technical analysis, intraday trading, MTF, pre-IPO investments, options selling, F&O, hedging, swing trading, long-term investing, and even commodities like gold and crude oil.
Through this journey, I realized that technical analysis is only about 20% of the equation. The real game is psychology and mindset.
I have distilled my learnings into concise points below—insights that have shaped my approach and will continue to guide me in my version 2.0 of trading. I hope they prove valuable to you as well.
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Position Sizing
One of the most important aspects of trading is choosing the right position size. Your trade should never be so large that it causes stress or worry. Keep it at a level where you can stay calm, no matter how the market moves.
Set Stop-Loss and Target Before Placing a Trade
Decide in advance when you will exit a trade—both at a loss (stop-loss) and at a profit (target). This helps maintain emotional balance, preventing extreme excitement or frustration.
How to Calculate Position Size
- Use technical analysis to identify your stop-loss and target.
- Example: If CMP is ₹100 and your stop-loss is at ₹94 (₹6 risk per share), determine your risk tolerance:
- ₹3,000 risk ➝ 500 shares (₹3,000 ÷ ₹6)
- ₹1,200 risk ➝ 200 shares (₹1,200 ÷ ₹6)
- Adjust quantity based on how much you're willing to risk.
Setting Target Price & Risk-Reward Ratio
The most important factor in setting a target is the risk-reward ratio. If your stop-loss is ₹6, your target should be at least ₹6, ₹9, or ₹12.
Why Is Risk-Reward Important?
Let’s say you take 10 trades—5 go in your favor, and 5 go against you. If your risk-reward ratio isn’t favorable, you could end up in a loss.
Example:
- You lose ₹6 in two trades → ₹12 total loss
- You gain ₹3 in three trades → ₹9 total profit
- Net result: -₹3 loss
To ensure profitability, your reward should be equal to or greater than your risk. A 1.5x or 2x risk-reward ratio is ideal.
Flexibility in Targets
Even when the price reaches Target 1, you can book partial profits and let the rest run with a trailing stop-loss.
---
Managing Multiple Trades
This is very important. If you're a beginner, limit yourself to 2 trades, and even if you're a pro, avoid more than 3-5 positions.
Example: If you have ₹2 lakh, make sure you have only 2 trades open at a time. Add a third stock only when you close another position.
---
How to Deploy Capital
Patience is key. If you have ₹1 lakh, divide it into 4-5 parts and buy in small chunks over time.
Why?
The nature of stocks is to move in waves—rising, facing profit booking, then breaking previous highs. Instead of investing everything at once, buy in staggered amounts to ensure your average price stays close to CMP.
---
Avoid Market Noise
When trading, stay in your zone.
Social media posts can make you feel slow compared to others, but they don't show the full picture. Avoid distractions like:
- Direct stock tips from news channels
- P&L snapshots from traders
- Following too many analysts on social media
Instead, listen to expert views, but stay disciplined with your own strategy.
---
Stock Selection
Stock selection has two elements—technical and fundamental (I'll write a separate post on this).
Always buy a stock that you can hold even in your darkest times.
Example:
- Choose blue-chip stocks with high market caps & strong promoter holdings
- Never buy a stock just because it’s in momentum
- If a stock turns into a forced SIP, it’s not a good buy
Pick stocks with a long-term story—even if you fail to exit at the right time, you should be comfortable holding them.
---
Accept That It’s the Market, Not You
Many traders fail because they don’t admit that the market is unpredictable.
Losses happen because of volatility, not necessarily poor strategy. Example:
- You lose a trade and try improving your method but face another hit
- Some losses are simply beyond your control
Most of what happens in the market is not in your hands—including stop-loss triggers. Accept this reality, and focus on risk management instead of revenge trading.
---
Keep Separate Trading & Investment Accounts
Trading and investing are different. If you keep them in the same account, you’ll:
- Book small profits on investments
- Hold short-term trades in losses
Having separate accounts keeps your goals clear.
---
Don’t Let the Market Dominate You
Even full-time traders shouldn’t obsess over the market.
Limit your screen time to 2-3 hours during market hours.
Why?
- You can’t act on global markets until 9:15 AM IST
- Even if a war or tariff issue arises, you can’t do anything until market open
- Overthinking leads to over-trading, which drains money
Instead, invest time in developing new skills.
---
Do What Suits You, Not Others
If you're good at swings, stick to swings. If you're good at intraday, do intraday.
Don't follow what works for a friend—trade based on what suits you.
---
Avoid FOMO
Don't stress if a stock jumps 20% in a day.
Stock accumulation zones, demand/supply areas, profit booking, and retests happen regularly—opportunities will always come.
Even traders who claim they made 20% in a day don’t share how often they got trapped chasing stocks.
---
Stop-Loss Is Your Best Friend
No, stop-loss is your best friend for life.
Example:
- Suppose you enter 10 trades in a month.
- 6 do well and you book profits.
- 4 go against you, but instead of exiting, you hold because you believe they’ll recover.
- Next month, you repeat this cycle—adding more positions.
Over time, this builds a portfolio of lagging stocks, and suddenly, your losses dominate your portfolio.
---
Even Experts Face Losses
Even professionals with advanced research teams lose money.
Retail traders often believe they can avoid losses by analyzing a few ratios, but losses are part of trading.
A stop-loss ensures you stay in the game long-term—instead of holding onto losing trades indefinitely.
---
Take a Break & Restart
Taking breaks is crucial. If everything is going wrong, don’t hesitate to press the reset button—step back, analyze, and refine your approach. A fresh mindset leads to better trading decisions. (I’ll write a detailed post on this soon.)
Over the past five years, I have explored nearly every aspect of trading—technical analysis, intraday trading, MTF, pre-IPO investments, options selling, F&O, hedging, swing trading, long-term investing, and even commodities like gold and crude oil.
Through this journey, I realized that technical analysis is only about 20% of the equation. The real game is psychology and mindset.
I have distilled my learnings into concise points below—insights that have shaped my approach and will continue to guide me in my version 2.0 of trading. I hope they prove valuable to you as well.
---
Position Sizing
One of the most important aspects of trading is choosing the right position size. Your trade should never be so large that it causes stress or worry. Keep it at a level where you can stay calm, no matter how the market moves.
Set Stop-Loss and Target Before Placing a Trade
Decide in advance when you will exit a trade—both at a loss (stop-loss) and at a profit (target). This helps maintain emotional balance, preventing extreme excitement or frustration.
How to Calculate Position Size
- Use technical analysis to identify your stop-loss and target.
- Example: If CMP is ₹100 and your stop-loss is at ₹94 (₹6 risk per share), determine your risk tolerance:
- ₹3,000 risk ➝ 500 shares (₹3,000 ÷ ₹6)
- ₹1,200 risk ➝ 200 shares (₹1,200 ÷ ₹6)
- Adjust quantity based on how much you're willing to risk.
Setting Target Price & Risk-Reward Ratio
The most important factor in setting a target is the risk-reward ratio. If your stop-loss is ₹6, your target should be at least ₹6, ₹9, or ₹12.
Why Is Risk-Reward Important?
Let’s say you take 10 trades—5 go in your favor, and 5 go against you. If your risk-reward ratio isn’t favorable, you could end up in a loss.
Example:
- You lose ₹6 in two trades → ₹12 total loss
- You gain ₹3 in three trades → ₹9 total profit
- Net result: -₹3 loss
To ensure profitability, your reward should be equal to or greater than your risk. A 1.5x or 2x risk-reward ratio is ideal.
Flexibility in Targets
Even when the price reaches Target 1, you can book partial profits and let the rest run with a trailing stop-loss.
---
Managing Multiple Trades
This is very important. If you're a beginner, limit yourself to 2 trades, and even if you're a pro, avoid more than 3-5 positions.
Example: If you have ₹2 lakh, make sure you have only 2 trades open at a time. Add a third stock only when you close another position.
---
How to Deploy Capital
Patience is key. If you have ₹1 lakh, divide it into 4-5 parts and buy in small chunks over time.
Why?
The nature of stocks is to move in waves—rising, facing profit booking, then breaking previous highs. Instead of investing everything at once, buy in staggered amounts to ensure your average price stays close to CMP.
---
Avoid Market Noise
When trading, stay in your zone.
Social media posts can make you feel slow compared to others, but they don't show the full picture. Avoid distractions like:
- Direct stock tips from news channels
- P&L snapshots from traders
- Following too many analysts on social media
Instead, listen to expert views, but stay disciplined with your own strategy.
---
Stock Selection
Stock selection has two elements—technical and fundamental (I'll write a separate post on this).
Always buy a stock that you can hold even in your darkest times.
Example:
- Choose blue-chip stocks with high market caps & strong promoter holdings
- Never buy a stock just because it’s in momentum
- If a stock turns into a forced SIP, it’s not a good buy
Pick stocks with a long-term story—even if you fail to exit at the right time, you should be comfortable holding them.
---
Accept That It’s the Market, Not You
Many traders fail because they don’t admit that the market is unpredictable.
Losses happen because of volatility, not necessarily poor strategy. Example:
- You lose a trade and try improving your method but face another hit
- Some losses are simply beyond your control
Most of what happens in the market is not in your hands—including stop-loss triggers. Accept this reality, and focus on risk management instead of revenge trading.
---
Keep Separate Trading & Investment Accounts
Trading and investing are different. If you keep them in the same account, you’ll:
- Book small profits on investments
- Hold short-term trades in losses
Having separate accounts keeps your goals clear.
---
Don’t Let the Market Dominate You
Even full-time traders shouldn’t obsess over the market.
Limit your screen time to 2-3 hours during market hours.
Why?
- You can’t act on global markets until 9:15 AM IST
- Even if a war or tariff issue arises, you can’t do anything until market open
- Overthinking leads to over-trading, which drains money
Instead, invest time in developing new skills.
---
Do What Suits You, Not Others
If you're good at swings, stick to swings. If you're good at intraday, do intraday.
Don't follow what works for a friend—trade based on what suits you.
---
Avoid FOMO
Don't stress if a stock jumps 20% in a day.
Stock accumulation zones, demand/supply areas, profit booking, and retests happen regularly—opportunities will always come.
Even traders who claim they made 20% in a day don’t share how often they got trapped chasing stocks.
---
Stop-Loss Is Your Best Friend
No, stop-loss is your best friend for life.
Example:
- Suppose you enter 10 trades in a month.
- 6 do well and you book profits.
- 4 go against you, but instead of exiting, you hold because you believe they’ll recover.
- Next month, you repeat this cycle—adding more positions.
Over time, this builds a portfolio of lagging stocks, and suddenly, your losses dominate your portfolio.
---
Even Experts Face Losses
Even professionals with advanced research teams lose money.
Retail traders often believe they can avoid losses by analyzing a few ratios, but losses are part of trading.
A stop-loss ensures you stay in the game long-term—instead of holding onto losing trades indefinitely.
---
Take a Break & Restart
Taking breaks is crucial. If everything is going wrong, don’t hesitate to press the reset button—step back, analyze, and refine your approach. A fresh mindset leads to better trading decisions. (I’ll write a detailed post on this soon.)
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.